Just when everyone had nearly abandoned the prospect of merger-and-acquisition activity among offshore drillers, Transocean
How did Pride pull off a billion-dollar deal at a time when the credit markets have seized up tighter than the 40 thieves' treasure trove in the Arabian Nights? The magic phrase in this case isn't "open, sesame," but rather, "cold, hard cash." Pride is selling its Latin American land-drilling and well-servicing assets to GP Investments, a large Brazilian private equity firm, for cash.
That's the idea, anyway. The deal hasn't closed, and while it isn't nearly as big as the shaky TXU
As for that second asset sale I mentioned: After dropping its big news on Friday, Pride followed up yesterday with an announcement that it has also sold off its three tender-assisted rigs for more than $200 million. If we bracket for a moment any potential financing snags, these two sales will give Pride a huge amount of firepower to develop its deepwater position. That's good news for both Pride shareholders and investors in companies like Keppel -- the firms that build these giant, high-specification rigs.